Balenciaga’s Gvasalia Throws Spotlight on Ukraine

Demna Gvasalia attends the 2017 CFDA Fashion Awards at Hammerstein Ballroom in New York City. (Getty Images)
Demna Gvasalia attends the 2017 CFDA Fashion Awards at Hammerstein Ballroom in New York City. (Getty Images)
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Balenciaga’s Gvasalia Throws Spotlight on Ukraine

Demna Gvasalia attends the 2017 CFDA Fashion Awards at Hammerstein Ballroom in New York City. (Getty Images)
Demna Gvasalia attends the 2017 CFDA Fashion Awards at Hammerstein Ballroom in New York City. (Getty Images)

Balenciaga creative director Demna Gvasalia threw the spotlight on the war in Ukraine, recalling his personal trauma as a refugee from Georgia at his winter show in Paris.

Guests were greeted with Ukrainian flag T-shirts and a note explaining that the war had triggered the pain of trauma the designer had carried since 1993, when "the same thing happened in my home country and I became a forever refugee".

"We, as a brand, have to do something ... we cannot take weapons and go fight there, but we can use our voices," Gvasalia told Reuters in an interview after the Paris Fashion Week presentation.

His show featured models marching through a blustery, glass-encased runway with swirling snow.

It kicked off with a woman in a black cape-like dress, swinging a sac resembling a stuffed plastic garbage bag. Others followed, walking against the wind in wide-leg trousers, oversize hoodies and floral-printed outfits.

An influential designer, Gvasalia played a central role in the rise of streetwear styles and is known for powerful runway presentations.

The designer said he had spent two years in Ukraine after the war in Georgia, where he still has family, before settling in Germany. Georgia, a former republic in the Soviet Union, was plunged into civil war after the break up of the bloc in 1991.

“When you go through war, you never forget that,” said the designer, whose native language is Russian.

Earlier this week, the Kering-owned label erased all images from its Instagram feed, which counts 12.8 million followers, leaving only an image of the Ukrainian flag, explaining that the platform would be used solely for relaying information about the situation in Ukraine.

Kering on Friday announced the suspension of operations in Russia, temporarily shutting its two stores there.



Birkenstock Results Beat on Resilient Demand, Forecasts Margin Recovery

A Birkenstock shoe is displayed at Birkenstock shoe store in London, Britain, October 11, 2023. (Reuters)
A Birkenstock shoe is displayed at Birkenstock shoe store in London, Britain, October 11, 2023. (Reuters)
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Birkenstock Results Beat on Resilient Demand, Forecasts Margin Recovery

A Birkenstock shoe is displayed at Birkenstock shoe store in London, Britain, October 11, 2023. (Reuters)
A Birkenstock shoe is displayed at Birkenstock shoe store in London, Britain, October 11, 2023. (Reuters)

Birkenstock beat market expectations for fourth-quarter results on robust demand for its pricey footwear and forecast a recovery in margins in fiscal 2025, sending the company's shares up 7% on Wednesday.

With fresh styles becoming a priority for consumers, Birkenstock's sandals and closed-toe clogs have drawn new customers both at its own stores and at retailers.

The company bypassed steep discounting trends evident during the holiday shopping season, which Birkenstock executives said was off to a strong start globally.

"The expansion of ranges into more closed-toe silhouette has helped boost revenue, given that they offer multi-season wear," Susannah Streeter, head of money and markets at Hargreaves Lansdown, said.

Germany-based Birkenstock's average selling prices across its product range were up 8% in fiscal 2024, in part due to higher sales of clogs, the company said, adding that closed-toe styles now made up about a third of its business.

The company has invested in expanding its global store presence and increasing manufacturing capacity this year to meet demand.

While it led to a 330-basis point drop in gross margins in fiscal 2024, Birkenstock forecast a recovery in margins in fiscal 2025 as it ramps up production from new facilities.

The company reported fourth-quarter revenue of 455.8 million euros ($478.27 million), compared with the average analyst estimate of 439.2 million euros, according to data compiled by LSEG.

However, Birkenstock's forecast for fiscal 2025 revenue to increase between 15% and 17% was below estimates of 17.5% growth.

"It would appear with this incredibly healthy growth, the company is choosing to adopt a conservative approach that they expect to be able to meet and beat," BMO Capital Markets analyst Simeon Siegel said.

On an adjusted basis, Birkenstock earned 0.29 euro per share, beating estimates of 0.26 euro.